A multi-zone model is applied to investigate the potential of ethanol fuel stratification to reduce the problematic high rates of pressure-rise that can occur in homogeneous-charge compression-ignition (HCCI) engines. The model is first validated against published experimental data. Novel techniques for inducing in-cylinder stratification are then identified, that involve exploiting the high latent heat of vaporisation of ethanol to induce thermal stratification. This stratification introduces a range of induction times into the cylinder, leading to a staged combustion event. The impact of water content in the fuel is also investigated. This study finds that ethanol fuel stratification has the potential to provide significant improvements relative to the nominally homogeneous operating condition. Significant reductions in pressure-rise rates are attainable, providing the potential for extending the possible operating regime to higher loads. The trade-off between reduced pressure-rise rate and increased NO emissions is discussed. Mixing the fuel with quantities of water, which has cost and overall energy efficiency advantages, is found to significantly reduce the NO production and slightly accentuate the reductions of pressure-rise rate. (C) 2012 Elsevier Ltd. All rights reserved.